I

103D CONGRESS

2D SESSION H. R. 5070

To amend the Internal Revenue Code of 1986 to repeal the 1993 Federal

income tax rate increases on trusts established for the benefit of individuals with disabilities.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 21, 1994

Mr. PAYNE of Virginia introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to repeal

the 1993 Federal income tax rate increases on trusts

established for the benefit of individuals with disabilities.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Persons With Disabil5 ities Trusts Tax Rate Restoration Act’’.
2

•HR 5070 IH

1 SEC. 2. REPEAL OF 1993 RATE INCREASES ON TRUSTS FOR

2 INDIVIDUALS WHO ARE DISABLED OR FOR

3 COLLEGE EDUCATIONS.

4 (a) IN GENERAL.—Section 1(e) of the Internal Reve5 nue Code of 1986 (relating to tax imposed on estates and

6 trusts) is amended to read as follows:

7 ‘‘(e) ESTATES AND TRUSTS.—

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2), there is hereby imposed on the taxable in10 come of—

11 ‘‘(A) every estate, and

12 ‘‘(B) every trust,

13 taxable under this subsection a tax determined in ac14 cordance with the following table:

‘‘If taxable income is: The tax is:

Not over $1,500 ............................ 15% of taxable income.

Over $1,500 but not over $3,500 .. $225, plus 28% of the excess over

$1,500.

Over $3,500 but not over $5,500 .. $785, plus 31% of the excess over

$3,500.

Over $5,500 but not over $7,500 .. $1,405, plus 36% of the excess over

$5,500.

Over $7,500 ................................... $2,125, plus 39.6% of the excess over

$7,500.

15 ‘‘(2) SPECIAL RULE FOR CERTAIN TRUSTS.—

16 ‘‘(A) IN GENERAL.—There is hereby im17 posed on the taxable income of an eligible trust

18 taxable under this subsection a tax determined

19 in accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $3,300 ............................ 15% of taxable income.
3

•HR 5070 IH

‘‘If taxable income is: The tax is:

Over $3,300 but not over $9,900 .. $495, plus 28% of the excess over

$3,300.

Over $9,900 ................................... $2,343, plus 31% of the excess over

$9,900.

1 ‘‘(B) ELIGIBLE TRUST.—For purposes of

2 subparagraph (A), the term ‘eligible trust’

3 means a trust which is established exclusively

4 for the purpose of providing reasonable

5 amounts for the support and maintenance of 1

6 or more beneficiaries each of whom is an indi7 vidual who is mentally ill or has a disability

8 (within the meaning of section 3(2) of the

9 Americans With Disabilities Act of 1990 (42

10 U.S.C. 12102(2)) at the time the trust is estab11 lished. A trust shall not fail to meet the re12 quirements of this subparagraph merely be13 cause the corpus of the trust may revert to the

14 grantor or a member of the grantor’s family

15 upon the death of the beneficiary.’’

16 (b) EFFECTIVE DATE.—The amendment made by

17 this section shall apply to taxable years beginning after

18 December 31, 1992.

Æ